Dabur Managing Brands Dabur India following the advice of Mckinsey has decided to layoff from the dayto-day

ay operations and leave the company in the hands of professionals. So its over to the new CEO late last year. Its no mean task to be CEO of a company where two of the four largest flagship brands Chyawanprash and Hajmola are slipping, and the biggest brand Dabur Amla Hair Oil (at Rs 175 crore) is growing at a lessthan-satisfactory rate, at five per cent. The problems dont end here. The companys baggage is too heavy for even an aggressive CEO to lug. With hundreds of products from therapeutics, juices, oral care to personal care, digestives and honey Dabur India hardly bears any semblance to a high-growth, nimble-footed FMCG giant in the making. Yet the company has big FMCG aspirations. CEO says hes found a way to stem the decline and is busy putting in place a new brand strategy. He made his intentions clear when he recently signed on Amitabh Bachchan as brand ambassador, for all of Rs 8 crore. He plans to reposition the company as a herbal specialist rather than flogging its ayurvedic lineage alone. Confining ourselves to the ayurvedic platform was restrictive as the domain could only be stretched to a certain level and not beyond, he says. We are as much of a personal care and toiletries company as a healthcare company, explains CEO. So, from now on, the platform for growth will be that of a herbal specialist. It is consistent with the business we are in, says CEO, and hes confident that Dabur will be able to span areas outside of the core of ayurveda.The new treatment of its decade-old identity marks a fundamental shift in the companys thinking. On the other front, as recommended by Accenture, Dabur has reorganized its brand and product portfolio which right now contains 500 products and 14 brands, apart from 25 sub-brands. This has done little to hedge the companys bets, as most are too small to make a significant difference to the companys fortunes. Daburs portfolio seems like the periodic table in chemistry, says a former executive. The companys aware of the problem: You cant have a brand profile which is proliferating and undisciplined, says CEO. That was the legacy we had. After months of deliberations last year, the top management team at Dabur put together a new brand architecture which will form the basis for all new launches. The old architecture was very complex and Dabur was heavily leveraged. The emerging portfolio line-up will be simpler and focused, CEO says. And it will leverage other strong brands for quicker growth. DIL will have five main brands Dabur, Vatika, Anmol, Real and Hajmola, and every product will be migrated to one of these. That will help us aggregate our media spend, explains CEO. Each of the brands will have a specific role in the new scheme of things. Dabur, for instance, which contributes over Rs 500 crore to the companys top line is positioned as a natural health brand rooted in ayurveda. The mother brand will lend an identity to an array of generics such as Chyawanprash, Lal Dant Manjan and

Amla oil, all the OTC healthcare products, and sub-brands in grey areas like Pudin Hara, Hingoli and Himsagar. While brand Dabur will be an anchor into the ayurvedic platform, others will make a strong pitch in the herbal arena. These include Vatika and the newly created Anmol apart from Real and Hajmola. Vatika will take a herbal beauty plank and this Rs 106-crore brand along with Anmol will spearhead DILs foray into personal care. Vatika, earlier just a hair oil and shampoo brand now has a fairness face-pack on offer.. Launches of more skin care products are planned to give Vatika a complete natural beauty face Company watchers believe that Dabur has always been weak on the pricing front and thats where Anmol comes in. Anmol is positioned as a value-for-money brand that will address a lower-SEC audience, competing with likes of Ayur and Cavin Kare. We plan to stretch Anmol across product categories such as hair care, oral and skin care for specific target consumers, says CEO. In the long run, DIL wants to have two flagship brands Dabur and Vatika which will leverage and build on each other. While Dabur will lend credibility, trust and ayurvedic expertise to Vatika, the latter will give former modernity, youthfulness and aesthetics, says CEO. We dont aim to be category leaders, instead we are happy playing in profitable niches and will gun for growth from them, he adds. Other than making the portfolio more manageable, its the task of driving heavyweights like Chyawanprash and Hajmola that is weighing heavily on CEOs mind. The category itself hasnt grown: It has been facing product life cycle issues which you disregard at your own peril, says CEO. But with new packaging and communication, DIL expects a jump. Amitabh Bachchan as a creative device is a good fit to the brand, explains CEO. According to FMCG analysts, the market expansion drive in healthcare categories may force the company to sacrifice some margins, but that doesnt bother DIL too much. We are building in more above-theline support behind brands like Chyawanprash and getting out of freebies and promos, CEO said in a post-result investor conference call last month. His assumption: increased category expansion driven by higher ATL spends would offset any pressures on margins. Another issue with Chyawanprash has been the perception that its a winter product. Earlier efforts to extend the brands consumption to the monsoons met with limited success, but Dabur is determined to address the issue. We could look at a formulation to produce a summer variant for Chyawanprash, says CEO. The digestive brand, Hajmola, is another top priority. And DIL doesnt want it to piggyback on the mother brand any more. At Rs 100 crore in revenues, says CEO, Hajmola is strong enough to stand on its own feet. Besides, theres an element of fun or experience attached to Hajmola which is in conflict with the serious personality of Dabur. It is a tasty digestive whereas the brand Dabur is associated with purposive healthcare, says CEO. And the two personalities need not mesh with each other. Extending Hajmolas equity, DIL has launched its first ever branded churan and is test marketing Hajmola Mast Masala in Kolkata. Within the candy

segment, Hajmola Fun 2, Bahar Fruity, Andar Naughty has sparked off a flurry of variants. Packing more punch into its flagging cash cows is fine, but theres a general feeling within the company that a broader reorganization holds the real challenge. Till last year, DIL had two large SBUs family products and healthcare. The company decided early this year to merge them into a single entity consumer care. This, the company feels, will drive large FMCG products that require high levels of distribution. In the process, Dabur had to contend with the disruption of its entire channel organization being merged. This meant reducing the number of dealers today the integrated system is at 50-60 per cent of the previous level. Says CEO, While you disengage a lot of dealers, you have to dry up pipelines to manage the whole exit in a smooth way. This was reflected in a temporary dip in sales during the first half of 2003, but DIL claims a smart recovery during the last two months.